Overpaying Mortgage

Janets_Daughter

Good Afternoon All,

I had just had a quick question, if you have a moment please.

If I overpay my mortgage by 10% annually (mortgage debt = £171000, monthly payments = £864), is it 10% including the monthly payment or 10% on top of the monthly payment?

Many thanks

strawb_shortcake

10% on top of the monthly payments. Our overpayments are based on the balance at the start of year.

Janets_Daughter

Thank you, I thought as much.

I had been using an overpayment calculator and confused myself!

getmore4less

Depends on lender

Some will make you reduce the payment if you overpay to the limit(say 10%) some will let you keep payment the same.

each lender has there own rule of what balance is used for the limit.

Janets_Daughter

I’ll double check with mine, NatWest, I did ask about overpaying and it was by 10%. I neglected to ask much details in the excitement of buying my first house.

Magnus91

Janets_Daughter wrote: »

I’ll double check with mine, NatWest, I did ask about overpaying and it was by 10%. I neglected to ask much details in the excitement of buying my first house.

I'm also with Natwest and can overpay 10% per year of the balance at the start of the year. The year starts from the date you took out the mortgage.

If you overpay more than £1000 in one go then they'll usually recalculate your monthly payments but if it's less than that it should be fine.

Janets_Daughter

Thank you. I was going to pay an extra £1300, so that’s helpful information.

JayCeeEssex

As a word of caution, check with your lender if it is 10% per calendar year or 10% per mortgage year that you can overpay by.
A small point, but one that could potentially cost you if you base your repayments on Jan - Dec and your mortgage runs say April - March.

Janets_Daughter

Will do, thank you.

Zero_Sum

Mines 10% of original loan